Analyst Toni Kaplan from Morgan Stanley maintained a Buy rating on KinderCare Learning Companies Inc and decreased the price target to $11.00 from $14.00.
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Toni Kaplan’s rating is based on the belief that KinderCare Learning Companies Inc (KLC) is currently undervalued, trading at a significant discount compared to its peers. Despite the expected seasonal decline in occupancy during the third quarter, Kaplan sees potential for KLC to stabilize its key metrics, such as enrollment growth and pricing, which have previously underperformed.
Kaplan anticipates that KLC’s operational execution will improve, addressing micro issues observed in previous quarters. The market’s current pricing suggests further weakness, but Kaplan’s analysis suggests that KLC’s valuation at approximately 5x NTM EV/EBITDA is attractive, especially when compared to the average of its peers. This combination of factors underpins Kaplan’s Buy rating for KLC, with an adjusted price target reflecting these insights.
Kaplan covers the Industrials sector, focusing on stocks such as Waste Management, Republic Services, and Equifax. According to TipRanks, Kaplan has an average return of 1.6% and a 54.13% success rate on recommended stocks.
In another report released on October 9, UBS also maintained a Buy rating on the stock with a $10.00 price target.